3 Outperforming Energy Stocks with More in the Tank

• The energy sector rose to new heights this week, when crude oil and natural gas prices climbed.
• Without a end for increased gas and oil prices, Wall Street analysts continue to boost their earnings expectations
• Hot enough to handle, or too Hot to not notice?
• This is the question to ask when it comes to the hottest Energy stocks.

The energy sector in the world climbed to new highs this week, as crude oil and natural gas prices climbed. This is an astonishing turn for a market which two years ago investors were afraid to touch with 10 feet of pole.

In the wake of bans on Russian imports increasing global demand and supply shortages are pushing the price of oil upwards after it reverted to an all-time high of 14 years which was reached in March. Prices for natural gas are increasing in anticipation of summer cooling season. These trends are positive for the profits of gas and oil-related businesses, and many expect to have another quarter of record-setting results.

There is no end to the rising prices of oil and gas, Wall Street analysts continue to increase their estimates of earnings on North American oil producers, refiners and pipeline operators. There are many investors taking advantage of the current momentum in energy stocks, despite the fact that they have seen a 50% increase year-to date.

Based on forward-looking estimates of earnings and price targets for sell-side Based on forward-looking estimates and price targets, there is plenty of fuel to be gained by the three companies in the energy sector.

Is Halliburton Stock Still a Buy?

Halliburton Company ( HAL, NYSE:) is up more than 80% in the past year, yet analysts are declaring it as a good buy. This is because the equipment and services company is expected to show similar performance to its last quarter’s revenue growth of 24% and 84% improvement in its bottom line.

The company is experiencing an increase in demand from both North American and overseas markets and oil exploration companies are rushing to profit from the favorable pricing market. Margins are rising and Halliburton is eager to be a part of the fortune. The board recently doubled the quarterly dividend payment , and is expected to authorize further increases with a payout ratio of less than 20 percent.

The consensus estimate of the earnings for the whole year is 77 percent increase from the previous year, which was 2021. Halliburon’s forward P/E of 23x is able to increase, as does the price of its shares. The majority of Street price targets announced after the Q1 update are in the upper 40s and a few include five handles.

Will Phillips 66 Stock Keep Going Up?

Phillips 66 ( PSX on the NYSE) is benefitting from rising commodities prices but in a different manner. As a midstream and downstream operator the company generates revenues through the transportation of oil as well as natural gas liquids (NGL) and the production of petrochemicals as well as plastics.

In the first quarter, Phillips 66 swung to profits that were almost exactly the same as the net loss that it incurred in the previous year. Revenues jumped 68 percent to $36.7 billion, fueled by impressive performance within its Chemicals and Refining businesses. With demand for refined goods like diesel, gasoline and jet fuel predicted to rise, Wall Street is now forecasting a major $5.00 increase in 2022’s earning per share (EPS) to $9.62.

The profits are expected to be normal over the next few years, but remain far higher than they stood in 2021. Even after growing by 40% this year and these shares trade a bit lower than their historical five-year P/E trailing 19x.

As with many Energy stocks Phillips 66 is at an all-time high for the 52-week period, but is lower than its all-time high, which was set before the outbreak this pandemic. In the last month, five companies have renewed their buy ratings, including Piper Sandler, which raised its price target to a record-breaking $120, stating that there are additional “legs” to this rebound story.

What is the Upside for Enbridge Stock?

Enbridge Inc. ( ENB on the NYSE) has more than doubled since its March 2020 low , but it is about 20% away from its record-setting highest. The world’s largest energy infrastructure firm posted the top line of 24% in its first quarter growth, but also saw a dramatic decrease in its profits due to the loss of foreign exchange hedges within the Energy Services segment. Forex setbacks cast shadows on an excellent quarter, but is likely to be more like an anomaly rather than a pattern.

Analysts are expecting higher overall profits for each of the next three quarters , as Enbridge fulfills the demand for its vast network of natural gas pipelines throughout the recovery of the economy. Enbridge is the main source of Canadian imports of crude to U.S. markets. U.S. and nearly one-fifth of U.S. natural gas consumption. There is also an emerging renewable energy business that has facilities in the waters of Canada and Europe.

A large portion of the potential return for Enbridge is due to the generous dividend payouts that the company pays out. The latest quarterly dividend yields that it has a 5.7 percent forward yield, which is higher than the sector average. While recent price targets by analysts indicate an essentially flat share price and investors should expect an impressive dividend yield to boost the total return of the stock.